Thursday, January 31, 2013

Silence: The Impending
Threat to the Charitable Sector is a
high-stake and explosive investigative work about charity misdeeds. As you read
this, there is a noteworthy charity fraud being perpetrated.

Scandals threaten to destroy the reputation of
the charitable sector. These scandals threaten to destroy the reputation of
powerful organizations and their leaders.

Charity malfeasance is an addiction of epic
proportions. Charity leaders and regulators, by their silence and denial, are
enablers.

Because the misdeeds are kept secret, there was
no public outcry. The secrets are now being exposed. The sector needs a new
paradigm, and Silence makes hundreds of suggestions as to how to turn it around.

This exposé is based on the largest repository
of charity fraud anywhere. Many trusted leaders are exposed including board
members, presidents, superintendents, chief executive officers, accountants—
and more. They embezzled, forged, extorted, and falsified records; they
self-dealt, negligently managed assets, and had multiple conflicts of interest.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

As if things couldn’t get worse at the St. Thomas More parish in Troy (MI).
Troy police and the archdiocese are investigating whether Rev. Edward Belczak,
the pastor at the church embezzled or mismanaged $429,000. According to the
archdiocese, investigators are trying to figure out whether Belczak padded his
salary, paid a ghost employee $240,000 over the last six years and mishandled
collections for Mother's Day and Father's Day, among other allegations.

The removal of Belczak has shocked many in metro Detroit who
knew him as a charismatic man who grew the parish into one of the biggest
Catholic churches in Oakland County. He was pastor there for 30 years before
his removal last week.

Now two other investigations are under way. The pastor bought a
half-million-dollar condo in Florida from his longtime church administrator in
Wellington, Fla., for $500,000. The amount paid was $50,000 more than the
administrator initially paid and is currently worth $370,000. In addition to
paying the mortgage, as the owner, Belczak would have to pay taxes that ranged
from about $8,500 to $10,500 a year over the last six years, according to
records with the Palm Beach County Constitutional Tax Collector. Last year, the
tax bill for the condo was $8,460.73. Its highest rate since Belczak bought it
was $10,525.46, in 2008. It is unclear how Belczak paid for the home or maintained it. In metro
Detroit, priests earn about $27,500 to the mid-$30,000 range, depending on
years of service.

According to an expert, "That raises all sorts of conflicts of
interest and other problems. So it raises eyebrows."

The
other embezzlement investigation focuses on a travel
group, which organized church trips. Investigators are looking into whether
Belczak may have accepted $25,000 in residual commission checks to the travel
group that should have been deposited or recorded in parish accounts. (DetroitFree Press)

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

Wednesday, January 30, 2013

The Virginia FFA
Association - formerly known as the Virginia Future Farmers of America - is a
youth leadership organization that provides programs and experience to students
interested in agriculture education. The Virginia FFA Foundation is a separate
nonprofit, with a separate governing body, from the Virginia FFA. The
organization’s foundation collects money from businesses, organizations and
individuals, and those funds support FFA activities.

The foundation’s
volunteer treasurer admitted to state police that he took $722,849 from
foundation accounts without authorization and placed the money in a personal
account for his own business.The foundation's
treasurer until approximately June 1, was the only person authorized to write
checks. Where was the board?

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

Monday, January 28, 2013

by Gary SnyderAnother charity co-founded by Lance Armstrong said it has dropped the former cyclist. The latest affiliated organization to cut ties with Mr. Armstrong in the wake of official doping allegations and his public confession. Athletes for Hope, a six-year-old group based in Bethesda, Md., took down Armstrong's photo from its website after a Jan. 17 interview with Oprah Winfreyin which he admitted doping. The move comes two months after Mr. Armstrong separated from Livestrong, the cancer charity he founded. Athletes for Hope began as a collaboration between three principals: Mr. Armstrong, tennis star Andre Agassi and women's soccer star Mia Hamm.The group's funding has declined in recent years, according to tax filings. A multiyear grant that totaled more than $2 million from the W.K. Kellogg Foundation ran out early last year. He said the group's fundraising difficulties reflect a weak economy. Livestrong gave Athletes for Hope $50,000 in 2012 and will consider additional grants in the future.Athletes for Hope has close ties with associates of Mr. Armstrong. Mark Levinstein, a lawyer who has represented the former cyclist, is a board member. Bill Stapleton, Mr. Armstrong's longtime agent, and Doug Ulman, the president of the Livestrong Foundation, also serve on the board. All have retained their roles. (WSJ)Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

Tuesday, January 22, 2013

Despite protestations to the contrary, the Livestrong charity is
hurting.

Lance Armstrong apologized to the staff
of his Livestrong cancer foundation and putting Livestrong at risk by using
performance-enhancing drugs during a career in which he seven times won the
Tour de France. A survivor of testicular cancer and founder of the charity,
Armstrong had stepped down as its head after the USADA report became public.

Afact sheet on the foundation’s websitenotes that the organization raised $48 million in
2012, but its 2013 operating budget is projected to be only $38.4 million, a
10.9 percent reduction from its 2012 budget. Although its total revenues have
been increasing, that is due to increasing amounts of “other revenues”
attributed to licensing fees and the sale of products.

Meanwhile, contributions
and grants declined from a shade less than $41 million in 2009 to$29.7 million in 2010,$24.7 million in 2011,
and $23.4 million in 2012. To maintain a high operating budget, the foundation
is probably drawing on its hefty fund balance, which had grown from $90.6
million at the end of 2010 to $103.4 million by the end of 2011. It is hard to
imagine that Livestrong won’t suffer more in terms of lost contributions as
more details come out. (h/t Rick Cohen, NPQ)

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

Monday, January 21, 2013

Confidential reporting hotlines can uncover fraud in half the time as other safeguards, according to an article in the Bennington Banner. Certified fraud examiner Christopher Rosetti said confidential reporting was proven in the business world to be the most effective tool at combating fraud, abuse, and waste. Rosetti said contrary to creating distrust, a confidential reporting system reinforced unity because most people are honest and ethical -- and willing to step forward, at least anonymously.

Citing a biennial survey by the Association of Certified Fraud Examiners (Rosetti sits as chair on that association's foundation), the fraud expert said the average organization lost about $6 a day per employee to fraudulent behavior.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

Thursday, January 10, 2013

A former bookkeeper for the Salvation Army in Santa Rosa joins a growing list (see: http://nonprofitimperative.blogspot.com/2012/11/nonprofit-fraud-is-salvation-army.html) of employees lining their pockets from the Christian charity. Investigators believe the bookkeeper took the money from a “Season of Sharing” fund that provides emergency cash to people who need help covering bills during times of need. She worked about a year at the charity and is suspected of stealing $50,000 during that time.

Police allege that she cut checks for herself as well as family members and friends who then cashed the checks on her behalf. The bookkeeper told others the checks were payroll advances. She appeared to have used the money to pay bills and forged checks to pay rent.

Officers arrested her at her home on suspicion of grand theft and forgery. She was later released on $25,000 bail.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

Friday, January 4, 2013

Record Amount of
Embezzlement Documented. As a result of tips from readers, Nonprofit
Imperative has documented record nonprofit fraud. In just a three-week
period, NI recorded $308 million embezzled from over 100 agencies. These
small, medium and large charities and governmental organizations
represent just a small cross-section of those that have been impacted.
The Association of Certified Fraud Examiners suggests that it represents
only 5% of the pillage from all organizations. A 2011 study noted that
nonprofits, including religious organizations, experienced the most
embezzlement cases of all industry categories, only behind financial
institutions.

The Internal Revenue
Service Recognizes the Magnitude of the Charity Fraud Problem. An IRS survey
announcement stated that there is overwhelming evidence that there is
"significant diversion" of charitable assets. The study also
noted the lax enforcement with only 29% of the perpetrators resulting in
charges; 3% paid full restitution; only 16% ended in incarceration or
probation.

Authorities Around the
World Acknowledge Charity Fraud As An Issue; Except in the U.S. Just last week, The
National Fraud Authority in the UK rolled out a survey of fraud in the
charity sector in order to gain a better understanding of the problem.
This as a result of an increase of serious incidents of fraud by more
than 75% in 2009-10. Other countries around the world are also monitoring
the problem as well. Canadians are worried about charity fraud with 66%
of them concerned about it. Other countries addressing the charity fraud
problem include Israel, Italy, South Africa, and New Zealand. The USA has
shown no such interest.

Despite the unwillingness of those in leadership positions to
acknowledge that there is a problem, we will continue to put a spotlight on
this serious scourge. We will, with your continued input, send out our
twice-monthly e-newsletter, keep updating our popular blog, respond to investigative reporters and electronic media and
assist state and federal regulators.

We wish you a great New Year.

Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however.
Cites in various media:
Featured in print, broadcast, and online media outlets, including: Vermont Public Radio, Miami Herald, National Public Radio, Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), FOX2, ABC Spotlight on the News, WWJ Radio, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, The Chronicle of Philanthropy, St. Petersburg Times, B, USA Today Topics, Newsweek.com, Responsive Philanthropy Magazine, New York Times...and many more
Nonprofits: On the Brink (2006)
Silence: The Impending Threat to the Charitable Sector (2011)

About Me

Gary Snyder is the author, most recently, of the groundbreaking expose on the charitable sector, Silence: The Impending Threat to the Charitable Sector as well as the often-cited guide on best practices and key concepts, Nonprofits: On
the Brink.

He is the publisher of a
twice-monthly newsletter, Nonprofit Imperative that gives an update on the current status of the
charitable sector.

Snyder is often quoted and frequent contributor to the blog of the National
Committee for Responsive Philanthropy. Snyder twiceauthored the Governance Chapter of the Michigan
Nonprofit Management Manual (4th and 5th editions).

He is a speaker on ethics,
financial and governance matters of the sector. For almost a decade, Snyder is frequently
consulted by Congress and has been quoted in print, broadcast and online media
outlets.